Process location decisions

Author: Ellen Zhuang ^[2016]

Stewards: Daniel Garcia, and Fengqi You

Introduction

Location is one of the first decisions in the design of a new chemical plant. It impacts the profitability of the project and the scope for future expansion. If the project is a new facility, a suitable site must be found and an optimal layout of the site and process units must be planned. If the project adds to an existing site, the impact of the new addition on the existing plant must be considered. The plant also needs to accommodate for the nearby infrastructure, the services that it requires, and its environmental impacts.

Location Selection Factors

A plant's site is chosen based on several factors. These include:

1. Location with respect to market: If the plant produces high-volume and low-cost products, such as cement and fertilizer, it may be better to situate the plant closer to the primary market since transportation cost is a large fraction of the sales price. If the product is low-volume and high-cost, like pharmaceuticals, then the benefits of being closer to the primary market may not be there.

2. Raw material supply: The location also depends on the availability and price of raw material. Facilities that produce chemicals in bulk are usually located close to the source of raw material if the costs of shipping the product is less than the costs of shipping the feed. For example, ethylene production is growing in the Middle East since cheap ethane from natural gas is readily available. Oil refineries tend to be located near areas with high population since it is expensive to transport the oil.